LADWP gets $30m of wildfire cover from new Power Protective Re cat bond

California based utility the Los Angeles Department of Water and Power (LADWP) has finally secured $30 million of wildfire insurance cover from its second catastrophe bond issue, after the Power Protective Re Ltd. (Series 2021-1) deal was priced at the raised coupon level.

The eventual and successful pricing of this second Power Protective Re cat bond demonstrates that wildfire insurance, or reinsurance, capacity is available from the insurance-linked securities (ILS) market.

But the process to get to this pricing shows that this is not at any cost and ILS funds and investors are demanding higher returns for the California wildfire peril after recent losses from it.

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UNDP launches Insurance & Risk Finance Facility, ILS support anticipated

The United Nations Development Programme (UNDP) has today launched the Insurance and Risk Finance Facility (IRFF), a new initiative that aims to build financial resilience and bridge a $1.4 trillion global health, mortality, and disaster protection gap, with support from the insurance-linked securities (ILS) market expected in future.

Importantly, this Insurance and Risk Finance Facility (IRFF) will work to channel risk to private insurance, reinsurance and capital markets over-time, and aims to significantly increase the role of insurance and risk-financing in development.

The German Government has contributed €35 million in funding to the Facility, which will be used for technical work and capacity building on the ground, as well as for the development of new insurance products.

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Germany contributes $40.9M to risk transfer initiative

The United Nations Development Programme said Monday that the German government has contributed €35 million ($40.9 million) in funding for a new risk transfer initiative, the Insurance and Risk Finance Facility, within its Finance Sector Hub.

The goal is to co-create insurance and risk finance solutions in over 50 developing countries by 2025 and contribute to the InsuResilience Vision 2025 target of protecting 500 million poor and vulnerable people by 2025.

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Red Cross volcano cat bond issuance recognised for ESG credentials

The first parametric catastrophe bond covering pure volcanic eruption risk, which was brought to market by Replexus and Howden Capital Markets and for the Danish Red Cross has been recognised for its environmental, social and governance (ESG) credentials.

The Guernsey International Insurance Association (GIIA) has awarded its first environmental, social and governance (ESG) accreditation to an insurance entity and that entity is the Dunant Re IC Limited incorporated cell of Replexus ICC (Guernsey) Limited, the issuer of the volcano catastrophe bond earlier this year.

Operated and arranged by Cedric Edmonds, Founder and Director at Replexus ICC, while managed by Aon Insurance Managers (Guernsey), the vehicle has been recognised thanks to being the home to the first humanitarian catastrophe bond issuance.

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CEA’s risk transfer returns to $9.6bn. Short-term future needs less certain

The California Earthquake Authority (CEA) increased the size of its reinsurance and catastrophe bond risk transfer program by around 4.4% as of the end of July 2021, to reach almost $9.6 billion, but in the short-term future growth of the program seems less certain due to rising exposure and the cost of coverage.

That’s practically the same as the record size for the program, of also almost $9.6 billion of risk transfer that the CEA had in-force as of October 2020.

A relatively significant amount of catastrophe bond maturities shrank the CEA’s risk transfer and reinsurance program, back to $9.15 billion by December 2020, a figure it remained at through the end of last year.

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CCRIF makes $2.4m parametric rainfall payout to Trinidad & Tobago

The CCRIF SPC (formerly known as the Caribbean Catastrophic Risk Insurance Facility), has made a US $2.4 million payout to Trinidad & Tobago after the Caribbean nations parametric excess rainfall insurance policy was triggered recently.

Including this latest payout, the CCRIF’s parametric disaster insurance policies have now paid out 54 times, amounting to $245 million paid out to 16 of its 23 members, with all payouts made within 14 days of the event occurring.

The Government of Trinidad and Tobago has received this latest payout after a heavy rainfall event that occurred during August 18-20, 2021 triggered its excess rainfall policies parametrics.

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Weather disasters drive US $ 3.64 trillion in losses in 50 years: WMO data

The high costs of weather disasters around the globe is truly laid bare by the latest data from the World Meteorological Organization (WMO), which estimates that weather, climate and water related disasters drove some US$ 3.64 trillion in losses over the last 50 years.

The WMO’s latest Atlas of Mortality and Economic Losses from Weather, Climate and Water Extremes covers the period from 1970 to 2019, during which over 2 million lives were lost to these disasters.

That is from more than 11,000 reported disasters recorded, and during the period the research found that weather, climate and water hazards accounted for 50% of all disasters, 45% of all reported deaths and 74% of all reported economic losses, while more than 91% of these deaths occurred in developing countries.

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NFIP cat bonds & reinsurance in focus as Ida’s remnants flood New York

The remnants of hurricane Ida have continued to drop torrential rain along its path north east and its slow pace and heavy downpours have now flooded parts of New York, all of which is heightening the risk posed to FEMA’s catastrophe bonds and reinsurance tower for the National Flood Insurance Program.

As we explained yesterday in our analysis of catastrophe bonds that have seen secondary market price declines in the wake of hurricane Ida’s landfall and impacts in Louisiana and the surrounding region, the FloodSmart Re catastrophe bonds are among those considered potentially exposed.

The US Federal Emergency Management Agency (FEMA) has been procuring reinsurance for its National Flood Insurance Program (NFIP) for a few years now, both from traditional reinsurers and the capital markets using catastrophe bonds.

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Indonesia launches US $500m risk pooling facility. Risk transfer a goal

The government of Indonesia has launched a new disaster risk pooling facility that will initially have more than US $500 million of capacity available to help pay for the economic costs of natural catastrophes and severe weather events, but with a future goal of transferring some or all of the risk to private insurance or capital market sources.

Indonesia’s move to create a disaster risk pool comes after a number of year’s of work with the World Bank and other organisations to better understand its exposure to disaster risks and the costs it suffers from them.

It’s estimated that Indonesia suffers somewhere between US $1.3 billion and US $1.5 billion of economic damages from natural disasters on average each year.

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Agricultural Impacts of Flooding in Henan, China

The record rainfall that hit the province of Henan in China the week of July 19 caused extensive flooding that led to mass displacement and casualties. Some reports provided estimated impacts to the agricultural sector.  Here, we put those estimates into context for the agricultural insurance market in China.

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